ENTA - NASDAQ

Good afternoon, and welcome to Enanta Pharmaceuticals’ Fiscal Third Quarter Financial Results Conference Call. At this time, all participants are in a listen only mode. There will be a question-and-answer session at the end of prepared remarks. Please be advised that this call is being recorded. I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.

Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal third quarter 2023 financial results was issued this afternoon and is available on our website. Making formal remarks on today’s call are Dr. Jay Luly, President and Chief Executive Officer and Paul Mellett, our Chief Financial Officer; and Dr. Scott Rottinghaus, our Chief Medical Officer and Dr. Tara Kieffer, our Senior Vice President of New Product Strategy and Development will be available during the Q&A portion of the call. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. I would now like to turn the call over to Dr. Jay Luly, President and CEO. Jay.

Thank you, Jennifer, and good afternoon, everyone. At Enanta, we are committed to our mission of being a leader in the development of groundbreaking therapeutics for viral infections, and this quarter we made important strides to bring us closer to impactful inflection points and ultimately our goals. I’m proud of the work our team has accomplished this quarter and throughout the year so far across our pipeline and business, most notably in our respiratory syncytial virus or RSV program and our COVID-19 program. We are in a strong position to continue to advance our pipeline, and I’m confident in our team’s efforts to progress antiviral small molecule medicines to treat life-threatening viral infections. Today, I will provide an overview of our progress during the third quarter, beginning with our RSV program, and then I will comment on our COVID-19 program in the rest of our pipeline. RSV is a severe respiratory infection associated with significant morbidity and mortality that can cause serious disease in children, the elderly and the immune compromised. RSVs received a significant amount of attention recently with the approvals of new vaccines and monoclonal antibodies to help prevent severe infection. However, given the experience with COVID and flu vaccines, including limited adoption and breakthrough infections, we believe a safe and effective oral RSV antiviral medication can bring significant value to patients infected with RSV. Starting with our most current update, we recently announced positive data from the Phase 1 trial of EDP-323 in healthy volunteers. As a reminder, EDP-323 is our L-protein inhibitor in development as a once-daily oral treatment for RSV with fast track designation from the FDA. This Phase 1 study enrolled healthy volunteers to evaluate the safety, tolerability and pharmacokinetics of Oral EDP-323 and single ascending doses and multiple ascending doses for seven-days along with the effect of food. The SAD Phase enrolled a total of six cohorts ranging in dose from 50 to 800 milligrams and the MAD Phase enrolled four cohorts with doses ranging from 200 to 800 milligrams. EDP-323 was found to be generally safe and well tolerated up to the highest dose tested of 800 milligrams over seven-days. Most adverse events were mild and there were no serious or severe adverse events. There was one study discontinuation due to syncope, which was deemed unlikely to be related to EDP-323. EDP-323 exposure increased with increasing single and multiple dosing up to 600 milligrams with a half-life ranging from 11 to 17 hours supporting once-daily dosing. EDP-323 doses ranging from 200 to 800 milligrams once-daily, resulted in strong EC90 multiples against both RSV-A and -B strains and what administered for seven-days were found to result in C24 concentrations of steady state of 11 to 44 fold over protein adjusted EC90 of 0.3 nanomolar against both RSV-A and -B strain. Additionally, no food effect was observed with a high fat meal suggesting that EDP-323 can be administered without regard to food. We are pleased with this encouraging safety and pharmacokinetic data in virology when a potent antiviral such as EDP-323 achieves high multiples of EC90 safely. It is a very positive signal and an important de-risking step for the program. These data enhance our belief in EDP-323 as a potential therapeutic and give us the confidence to continue to progress the program. We believe EDP-323 could serve as a standalone treatment or be used in combination with other agents such as EDP-938 to broaden the treatment window or addressable patient population for RSV. We plan to initiate a Human RSV Challenge study evaluating EDP-323 early in the fourth quarter, and we anticipate having results in the second quarter of 2024. Our broad RSV program also includes EDP-938, the only N protein inhibitor in clinical development, which we are currently evaluating in multiple Phase 2 studies as a potential treatment in high risk patient populations. These studies include RSVPs, a Phase 2 randomized double-blind placebo controlled study in hospitalized and non-hospitalized pediatric RSV patients, RSVHR, a Phase 2b randomized double-blind placebo controlled study in adults with RSV infection, who are at high risk of complications including the elderly and individuals with congestive heart failure, chronic obstructive pulmonary disease or asthma and RSVTX, a Phase 2b randomized double-blind placebo controlled study in adult hematopoietic cell transplant recipients with RSV and symptoms of upper respiratory tract infection. Enrollment for RSVP, RSVHR and RSVTX is ongoing and we are utilizing sites in both the Northern and Southern Hemispheres to optimize our coverage of potential RSV surges. If there is a return to a normal pre-pandemic type of RSV season in the Northern Hemisphere, we expect to complete enrollment in one or more of these studies in the upcoming Northern Hemisphere season and to have data in fiscal year 2024. Turning to COVID-19, we announced additional analysis from the Phase 2 ARS-CoV-2 SPRINT study, which built upon our positive top-line results that we announced in May of this year. EDP-235 is our clinical stage once-daily orally dosed inhibitor of Corona virus 3CL protease that was evaluated in SPRINT. A randomized double-blind placebo controlled Phase 2 clinical trial in 231 adults with mild or moderate COVID-19 who did not have risk factors for progression to severe disease. Patients received 200 or 400 milligrams of EDP-235 or placebo orally once-daily for five-days. In the Phase 2 study, EDP-235 was found to be generally safe and well tolerated. A statistically significant dose improvement in symptoms was observed in the 400 milligram cohort, starting as early as one day following the first dose. In a predefined subset of patients enrolled within three-days of symptom onset. A statistically significant dose dependent improvement in symptoms was observed at all time points and a two-day shorter time to improvement was observed in a subset of six symptoms and the 400 milligram cohort compared to placebo. Additional analysis announced in June demonstrated a virologic effect of EDP-235. In the subset of patients, who had not recently been infected, as measured by lack of antibodies to the SARS-CoV-2 nucleocapsid, whom we refer to as nucleocapsid negative patients. Specifically in nucleocapsid negative patients, a 0.8 log decline and viral load was observed at day five with 400 milligrams of EDP-235, compared to placebo and a one log viral load decline at day five in the subset of nucleocapsid negative patients who were treated within three-days after symptom onset. Looking ahead, our current plan is to conduct all future COVID-19 work in the context of a collaboration. In particular, we continue to focus on progressing EDP-235 and to Phase 3 trials with a partner and gaining regulatory feedback to further enable a partnership. Moving on to our dual inhibitor research program targeting HMPV and RSV, we plan to select a clinical candidate in the fourth quarter of this year. In preclinical studies, our prototype dual inhibitor potently inhibited both HMPV and RSV replication in a dose dependent manner demonstrating a significant reduction in viral load of each virus and maintains nanomolar activity against multiple genotypes and strains of HMPV and RSV in a range of cell types. Our dual inhibitor is broader spectrum antiviral that would allow respiratory infections diagnosed as either HMPV or RSV, both of which are significant causes of respiratory tract infections globally to be treated with a single agent aiding populations such as children and the elderly who are at greatest risk. In hepatitis B, we continue to monitor the field for compounds to develop in combination with EDP-514, our potent core inhibitor with FDA fast track designation and a nucleoside reverse transcriptase inhibitor. We believe a core inhibitor such as EDP-514 will ultimately be an important component of a successful combination regimen and that can potentially help us address the high level of unmet need in HPV. Finally, looking beyond virology, we are piloting new programs that leverage our course strengths and small molecule drug discovery and look forward to sharing more details on these growth areas with you in the coming months. I would like to wrap up by highlighting our near-term milestones. Again, we are thrilled with the progress of EDP-323, and the positive results from our Phase 1 study, and we plan to advance EDP-323 into a human challenge study early in the fourth quarter. We anticipate having results in the second quarter of 2024. We plan to announce the selection of a dual inhibitor clinical candidate targeting both HMPV and RSV in the fourth quarter of this year. And if there is a return to a normal pre-pandemic type of RSV season in the Northern Hemisphere, we expect to complete enrollment in one or more of our Phase 2 studies of EDP-938 in the upcoming Northern Hemisphere season, and have data in fiscal year 2024. With that, I will turn the call over to Paul to discuss our financials. Paul.

Thank you, Jay. For the quarter total revenue was $18.9 million and consisted of royalty revenue earned on AbbVie’s global MAVYRET net product sales. This compares to total revenue of $19.5 million for the same period in 2022. In April, 2023, we sold 54.5% of our ongoing MAVYRET royalties from AbbVie for an upfront payment of 200 million from OMERS, one of Canada’s largest defined benefit pension plans. For financial reporting purposes, the transaction will be treated as debt with the upfront purchase payment of 200 million paid to us being recorded as a liability. Enanta will continue to record 100% of future royalty payments as revenue and will then amortize the debt liability proportionately as royalties are paid to OMERS until a cap of 1.42 times the purchase payment is met. Interest expense will be recorded in our consolidated statement of operations as other expense based on an imputed interest rate. Moving on to our expenses, for the three-months ended June 30, 2023, research and development expense totaled $43 million compared to $39.1 million for the same period in 2022. The increase was due to the timing of clinical trial expenses in our virology programs. General and administrative expense for the quarter was $12.6 million compared to $12.9 million for the same period in 2022. Enanta recorded income tax expense of $4.2 million for the three-months ended June 30, 2023, driven by the receipt of the $200 million from the royalty sale agreement, which is taxable for Federal and State purposes. Enanta was able to utilize federal net operating loss and research and development tax credit carry forwards, as well as the deduction for foreign derived intangible income to substantially offset the taxable effect of the royalty sale agreement. For the three-months ended June 30, 2022 Enanta recorded an income tax benefit of $0.4 million, which was due to the release of the state tax reserve during the period. Net loss for the three-months into June 30, 2023 was 39.1 million, or a loss of a $1.86 per diluted common share compared to a net loss of 31.7 million, or a loss of a $1.53 per diluted common share for the corresponding period in 2022. Enanta ended the quarter with approximately 392.5 million in cash and marketable securities. We expect that our current cash, cash equivalence in short-term and long-term marketable securities, as well as our ongoing royalty revenue should be sufficient to meet the anticipated cash requirements of our existing business and development programs into the second half of fiscal 2027. Driven by changes to our COVID clinical development plans, we are reducing external spending. To that end, we have updated our guidance for fiscal 2023. We now expect our research and development expense to be between 165 million and 175 million and our general and administrative expense to be between 50 million and 55 million. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q, when filed. I would now like to turn the call back to the operator and open the lines up for questions.

Thank you. [Operator Instructions] Our first question will come from Brian Abrahams with RBC Capital Markets.

Just a couple of questions from me. First off on the RSV program and 323, given the PK data that you and - the safety data that you saw with 323 and healthy volunteers. I’m curious if you could maybe elaborate a little bit more on your latest views on the combinability and complementarity between 323 and 938 and then had a follow-up. Thanks.

The 323 and 938, we have studied them pre-clinically to look at their combinability and pre-clinically they behave very well together. Ones an N-inhibitor, that is 938, ones an L-inhibitor, that is 323. So we don’t expect any issues with combinability from an interaction standpoint. I think the real question is, will we need to combine them or will we ultimately want to combine them in certain patient populations? And those are kinds of things that are going to take a little bit longer to sort out. Number one, we believe that 938 as a standalone could well have all the horsepower we need in garden variety RSV. 323 could also perform very well as a single agent. We will get more insights into that as we get data from the upcoming human challenge study. But I guess the question is mightn’t you want or need to combine them in a certain, very difficult to treat patient population, and that is something that we can certainly explore down the road or might you want to combine them to see if you could open up a treatment window that would be wider than either agent alone. Again, that is something that we can look at down the line is where optimizing the category. So, those are the initial thoughts, right now.

And then, on the COVID program, can you help us understand the implications of the data you recently reported showing those, viral load reductions in the nucleocapsid negative patients. Should we think about that as potentially speaking to a subpopulation that could down the line be uniquely targetable or just more as in further evidence or biological evidence of the mechanism here? And I guess, where do you stand in terms of the regulatory path forward, can you maybe speak to some of the paths you are exploring. Is it, might this still involve, an additional Phase 2 work, or moving right into Phase 3, perhaps exploring long COVID as well? Thanks. I will hop back in the queue.

Yes, so the patient population that you are referring to, I think it is the nucleocapsid negative patient population. These are people who haven’t had a recent COVID infection or haven’t had one at all. That is a sort of a unique antigen that you can look at to determine whether or not someone’s again had the virus somewhat recently. I think one of the takeaways that we gleaned from our further analysis of the data is, it is hard to measure viral load changes in the nose of people who have more recently been infected. And when you look at the patient population who hadn’t been most recently affected, you could measure viral load changes in the nose. As time goes on, probably everybody who hasn’t been infected is going to be infected. And, so variously that is going to sort of challenge the ability to look at that measurement of viral load change in the nose, but that doesn’t tell you anything close to the whole story, because what really matters is the viral load changes that are happening elsewhere in the body where sites of infection can set up shock and the respiratory tract and other tissues. So, we feel that that is the more important thing overall. This is why FDA has not, sort of embraced using viral load endpoints as a path to approval, but rather to focus on symptoms and outcomes as it relates to COVID infection. So looking at symptoms where, as you know, in the SPRINT data, we had very nice data set on symptoms and then ultimately that endpoint probably changes to hospitalization and death and certain patient populations that are at high risk. So, I think that is, sort of our take away from that data dataset and as a look forward, it really doesn’t change, I think, how you progress a drug through registration studies. Again, that is all going to be based on symptoms and other kinds of endpoints. With regards to registration, we are in communication with the regulators and this is not just in the U.S. but elsewhere. Really getting the latest thinking on pathways to approval and different kinds of trial designs. So, those discussions are in progress. And then as we said before, any next study is our plan to be conducting that study in the context of a partnership. So, that is ultimately is our plan is to identify that Phase 3 and commercialization partner and do so hopefully with greater insights from the latest thinking of the regulators in terms of pathways to approval.

Our next question comes from Jay Olson with Oppenheimer.

We are curious about the three RSV Phase 2 studies currently enrolling for 938. Can you talk about the enrollment speed, interest level and which one is gaining the most attention? And then for 2024 updates, do you expect to provide each Phase 2 readout one by one as the results become available or will you wait until they are all complete and disclose all the results together? And if you do choose to read them out sequentially, what would be the read across from one trial to another? Then I have a follow-up if I could.

We have the three Phase 2s for EDP-938 up and running. We have kind of doubled down on the footprint of trial sites. It is not a robust RSV season exactly now, we are sort of between seasons. Although we are still seeing activity in the Southern Hemisphere. We have sites down in Brazil and Argentina, New

I guess as you look ahead to the Phase 3 studies for 938, how will the adoption of the RSV vaccine play a role in your Phase 3 strategy?

Yes sue, there is vaccines and monoclonal antibodies. Maybe I will let Tara Kieffer speak to that one.

Sure. Hi Jay, this is Tara. So, in terms of the vaccines that have been recently approved in adults, we don’t anticipate that having much of an impact. Both GSK and Pfizer have guided towards minimal uptake of their vaccines at least initially in the first season. So, just by the way of example, GSK has sort of guided to expectations to be less than what they saw with Shingrix in the first year. So that was, say 7% in the first full-year. So we don’t expect that to have too much of an impact.

We have a question from Ed Arce with H.C. Wainwright.

Wanted to start with the RSV program 323, and the recent results from your Phase 1, including the PK supportive of once-daily. I missed the EC90 multiples that you stated, as well as the nanomolar potency. And then beyond that, I just wanted to ask, if you could opine on how we should think about benchmarking those relative to potential other agents in development or indeed how to indicate or handicap the probability of success?

So the potency of EDP-323, again, this is the L-inhibitor. It is extremely potent. It is 0.3 nanomolar, so 300 picomolar in terms of an inhibitor. That is good but it is good but not necessarily sufficient. What you want to see is obviously good PK and safety. So those were the two other things that we clicked off in the Phase 1 study. So in the MAD doses, we looked at 200, 400, 600 and 800. So a range of 200 to 800 milligrams and when we looked at the 24-hour trough time point, after a single dose at the low-dose, we saw multiples that were 11x, the EC90 and at the high dose, we saw multiples that were 44x the EC90. So just whopping multiples of that very potent EC90 and we were able to do that in a manner that was very safe and well tolerated. So, I know Ed, you have focused on infectious disease for a long time. When you have an agent where the potency it takes to sort of take out the bug and you can deliver those concentrations or high multiples of those EC90s safely with either antibacterials or antivirals, it is usually a very significant de-risking step along the way. So I think it bodes well. The next proof in the pudding, I guess goes to when we get inside that human challenge study, which again will be starting early next quarter. And with that, we will actually be able to look at antiviral effects at various doses. So, stay tuned for that. Hopefully that will enroll fairly straightforwardly because the human challenge study recall is in healthy volunteers that we, then infect with RSV. So it is not a question of seasonality, it is really just a question of bringing in a cohort after cohort of healthy volunteers to do your exploration. So, that will be the next step where we actually sit show hopefully some very solid antiviral activity.

Well, I agree that these early readouts do give a lot of confidence in the correlations to actual patient results. The other question I had was around the COVID program, and I believe this is a new sort of decision to look for partnerships for Phase 3 once you have completed the ongoing study. I’m wondering if the rapid drop in COVID vaccine demand as described recently by both Pfizer and Moderna impact the potential of the program either for licensing or otherwise?

Well, a reduction in vaccination, you know, can only lead to an increase in infection where you need an antiviral. So, we have always believed this to be the case that ultimately vaccines would never have a 100% efficacy. I had five vaccinations and still got COVID. So they are never a hundred percent efficacious and compliance is never a 100% and we have seen that compliance drop way, way off. Now meanwhile the COVID levels right now are a little, they are pretty low, starting to creep up a little bit here in Boston as we watch the wastewater every day, but they are still pretty low, but we will see what happens in the fall as we get closer to the sort of the normal season. So I think ultimately, we all now believe that the virus is not going away, it is going to go back into, sort of being like a nasty flu, and we need drugs for that. So I think, it is actually not new news that our decision on the partner in front. I mean, we made that - I think it is pretty clear last quarter that, and even before that we have telegraphed for really since the beginning of the pandemic that our ultimate aim is to define that commercial partner that would really handle the late stage work and give us a global footprint that we couldn’t possibly achieve as well a loan where we could do it. So that is still our plan. We will see what happens to the virus starting the fall.

And our next question comes from Eric Joseph with JP Morgan.

Just actually sticking with the point about benchmarking for EDP-323 I guess. What type of data readout from the Human Challenge study would kind of give you an indication that the molecule is differentiated perhaps from 938? Would you perhaps be including 938 as an active comparator in the trial? And maybe just more generally with respect to the trial design. Is there any, are there any key differences in the design of this upcoming hemo challenge study compared to that conducted in 2019 for 938? Thank you.

I think, I mean, we are going to use the same outset to conduct the study. I think you should be thinking of the study as being very much the same design. And I think the world’s best benchmarks to look at is EDP-938. That was one of the most robust data sets ever performed in or achieved in a human challenge study. So, 938 will be the standard that we will compare it to. We are not going to do sort of a side by side in this study that is, that would only drag it out further and postpone the time for us to get into later stage studies with the molecule. I think we have got such a good handle on that challenge data and how to look at that challenge data that we will be able to get pretty much everything we need to know from just the drug versus placebo. And to remind you, 938 the kinds of data that we showed with that was an extremely robust antiviral effect. So pretty much within 12-hours of dosing, 938, it altered the course of the infection. So people who were on 938 had viral loads that started to stabilize and decline, and people on placebo viral loads continued to rise and plateau, and only after many days returned back toward normal. So, it was a highly statistically significant antiviral effect that we achieved versus placebo. And the same was the exact result, when you looked at it was achieved with symptom scores as well. So, from a symptom standpoint, within a day of dosing symptoms had stabilized and started to go down. Whereas, people on placebo symptoms continued to progress, they got worse and they plateaued at elevated level and then only gradually resolved over time. So that is the kind of data that we are looking for. And again, we have got a very excellent benchmark comparator with EDP-235.

We have a question from Roy Buchanan with JMP.

A couple on 235, any publications or presentations of details from the SPRINT data expected later this year?

The timing on that is subject to getting presentations accepted at conferences. So, we are planning presentation of the data. So what I will say is, stay tuned on that front with regards to timing and we will certainly announce the time and place and the venue once we have been accepted for presentation.

And then anything you can give us on the tone of the partnering discussions for 235. As you mentioned, cases that are pretty low in the U.S. at least are people waiting to see how that plays out this winter? You also mentioned regulatory uncertainty, maybe is that a gating factor anything you can tell us about that?

Not in any degree of specificity, but you have hit on interesting bits that are not only on our minds, obviously partners think about these things too. Trying to exactly size what the market is and understand as clearly as they can what that regulatory pathway is. We can’t control what the infection looks like in a given season. But what we can try to do is glean clarity from regulators in terms of pathways. So, we are working on the part that we can control right now.

And then one last one on 514, this mechanism for combination. Are you looking at things that are already out there and being tested, like just TLR random choice or are you pretty much through those already and are you looking at something completely novel? Maybe hasn’t been in the clinic, maybe even from an academic lab?

We have looked at a lot of the usual suspects that are out there. I mean, obviously the TLRs are out there, people have looked at various RNAI approaches and whatnot. We haven’t grabbed onto what we think is necessarily the right mechanism yet. So we are still monitoring the field. It is a little bit frustrating, there aren’t a lot of sort of profound new steps forward in this field of HPV. So, right now, it is a little bit of a holding pattern. As I have said before, we are not going to, throw other agents in to create the triple combo. I think so we have a great deal of confidence that it is a study worth funding. So, in the meantime, we are hunting still.

Our next question comes from Akash Tewari from Jefferies.

Hey, this is [Amy] (Ph) on for Akash. Thanks so much for taking our questions. So the first question on EDP-323, what percent of the drug is bound to plasma protein in-vivo? And additionally, do you expect any safety risks from targeting RNA polymerization? We have seen neutropenia with lumicitabine, but no, that is a new analog, which is a little different, but would love to hear your thoughts here?

Yes, I don’t recall the level of protein binding, but the ratio or the multiples of the EC90 that I quoted earlier, which were ranged between 11 and 44 fold were already adjusted for that protein binding. So, whatever the protein binding is, this is on multiples on top of that, when you look at it from a free drug perspective. And you are correct lumicitabine being a nuke, a lot of the nukes in the field had issues, nukes not uncommonly suffer or benefit from, I guess depending upon how you look at it, broad activity across other polymerases. And so still seal activity can be a problem, but EDP-323 is a non-nuke polymerase inhibitor. And so far preclinical safety was excellent and human safety in terms of safety and tolerability at least from our Phase 1 study was also very, very strong.

And then on 235, are there any additional data sets that a potential partner would be looking for to support a collaboration? And then when do you expect to get clarity from a regulatory perspective on path to registration?

So I think right now we have the clinical data that we have, with regards to the SPRINT study. Again, we saw antiviral effect, we saw effect on symptom improvement. So those are the data that we have. And as I mentioned the regulatory discussions are ongoing. When we will finish those, they will be done when, we are done with the exchanges. So, it is hard for me to put a time point on that right now. But we will have further updates as we progress.

And then finally, one last one on cash runway. Can you go over the main drivers for you extending runway from 2026 last quarter to 2027 now? Outside of the owner’s royalty sale, are there any other ongoing portfolio prioritization activities that we should be aware of?

Well, as we have indicated, this is Paul Millett, we have made the decision to wait for a partnering situation to continue the Phase 3 work on 235, and that is a significant extension of our runway for the most part. And that is the primary driver and then obviously we have not discussed any potential revenue or anything like that from a partnering arrangement. It is just simply the expense sparing of the Phase 3 trials.

Our next question comes from Brian Skorney from Baird.

This is Luke on for Brian. Thanks for taking the questions. First on 323, any consideration with regard to the human challenge study design to maximize potential read through to real world populations? And then just a second one on HMPV and RSV, the dual inhibitor. As you finalize selection of that candidate, is there any consideration of potential compromises that make the candidate more or less able to potently inhibit either virus or are trade-offs not really a necessity in this situation?

Yes 323 again, it is the challenge study, right. It is the sort of rite of passage for RSV molecules. Everybody puts them through the challenge study, and for the most part, everybody runs the challenge study in a very similar way so that you can cross trial comparisons. They are always never perfect or ideal, but to the extent that you can compare data in this setup, it is helpful to run it in the same way. So, not every molecule that goes into a challenge study comes out successfully from a challenge study. So it is not a given, but we view it as a good next step. And one that, again, further de-risks things because if you come out of the challenge study with really robust data, you know that you have a good antiviral in a human setting. So, you put that in your back pocket. And then with regards to human metapneumo RSV dual. I don’t, there is not really, not sure I fully understand your question. I mean, we have, again, we put data out on a prototype. We are aiming to have our final candidate or our candidate finalized in Q4. You can never exactly balance potency, while I suspect you could try to do that maybe for the rest of your life trying to get everything exactly balanced. But that doesn’t kind of matter because you always, whenever you have a broader spectrum drug, there is always a dose defining pathogen, which is the one that you are the least potent against. Knowing that, if you dose for that, an account for that, then you will be good against the, in this case, the other pathogen, which has even greater potency. So, we are optimizing different characteristics of the molecule in that program, settling down to finalists that we are just doing sort of final characterization on the profile. And then assuming that all goes well. Again, we are targeting Q4 as the timing for that candidate selection, final selection.

We also have a question from [indiscernible] with Leerink Partners.

This is [indiscernible]. Thanks for taking our questions. Maybe first off, on your RSV program, which 323 doses are you planning to evaluate in the upcoming challenge study? I don’t know if you have mentioned that? And maybe also, I guess what learnings from the development of 938 so far. Could you apply to possible future development of 323? And are you planning to go after similar patient populations for 323 or could you explore other populations as well?

Yes, so, we haven’t disclosed the final doses for that study. We are likely to do that in connection with the announcement of the initiation of the study. So stay tuned for that. Again, we are aiming for early Q4. But suffice it to say there will be doses within the ranges that we have studied. We are really trying to just figure out what optimal doses for various exposures that we want to try to hit and look at the product profile overall. And then with regards to 938, I mean, we have learned a lot about RSV through the use of 938, and I can only imagine that we will have a more targeted expedient pathway for 323, based on our learnings, whether it was what we learned in the standard risk patient population, which is, that patient population doesn’t need a drug. And then through the recruitment of our three high risk patient populations, there is very interesting teachings in each of those patient populations that you can only sort of figure out once you get into them. And we have learned a lot along the way with 938. So, exactly the trial after the human challenge study that is something that we are thinking about, very diligently right now, but not ready to speak to today.

And also are you planning to pursue or evaluate 323 in similar patient populations or would you explore other types of patients as well?

Well, those are the three high risk patient populations. PEDs probably the largest patient population from a market perspective. High risk adults and immune compromised patients of different flavors. I mean, we have chosen from immune compromise, we at least in RSVTx with 938, we have zeroed in on hematopoetic stem cell transplant, but there is other immune patient populations, immune suppressed patient populations that one could also consider. But anyway, you want to be in a high risk patient population of one flavor or another if you really want to get it over the finish line.

And I’m showing no further questions at this time. I would like to turn the call back over to Jennifer Viera for any closing remarks.

Thank you, operator and thanks to everyone for joining us today. If you have additional questions, please feel free to contact us by email or call us at the office. Thanks so much and have a good night.